The S&P 500 closed in the bear market territory after dropping more than 20 percent below its record high earlier this year. The 2022 stock sell-off intensified on Monday, with the S&P 500 tumbling to fresh new lows for the year.
Fears of a recession are growing.
A bear market is when stock prices are going down for a sustained period of time, usually at least 20 percent from a recent high.
The S&P 500 fell 3.88 percent to 3,7749.63. This is its lowest level since March of last year. With it comes losses from its high record in January to a more than 21 percent decrease.
This week’s steep drop came only two days before a key Federal Reserve meeting. The Fed is expected to raise interest rates yet again in order to help get inflation under control. Some economists are predicting interest rates to increase by 0.75 percent.
Treasury bond prices dropped and pushed the 10-year yield to its largest one-day move since March 2020.
It wasn’t only the stock market that dipped so low. Cryptocurrencies took a major punch as well. Bitcoin was slammed downward by 15 percent, plunging below $23,000. Cryptocurrencies continued to slide today as investors bailed out of more risky assets in anticipation of interest rates rising. It is being called a crypto meltdown.
Two of the biggest cryptocurrency platforms in the world restricted activity yesterday as the wider market meltdown continued. The Celsius Network said it temporarily halted all withdrawals, swaps, and transfers.
Investors are continuing to digest a worst-than-expected inflation report that came out on Friday, and are expecting interest rates to keep rising.
Shares of major companies such as Boeing, Salesforce, and American Express dropped, dragging down the Dow. So too did beaten-up tech shares, like Netflix, Tesla, and Nvidia.
Recession fears picked up, with Nasdaq touching a fresh 52-week low and its lowest level since November 2020.
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